Thursday, March 24, 2005

Afflicted With Compromise

It’s just one long hang-over. Or maybe a persistent head cold. Perhaps a nasty bug that made its way into the food chain and now you just can’t seem to shake it. It’s definitely a sickness but not the gotta-go-to-bed falling down kind. Certainly it’s an affliction that at any moment could turn nasty so you need to pay attention to the symptoms and nip them quickly in the bud.

This illness is called “compromise” and it only promises to leave you weak and nauseous at the end of the day.

The President of the Arizona Senate, Mr. Ken Bennett asked the Arizona League of Cities to sit down with the cable industry (read Cox) and hammer out a compromise on the legislation that Cox is promoting that will pre-empt local franchising authorities ability to regulate Cox. Can we all sing Kum Bay Ya?

The particulars of the talks include delaying the implementation of the legislation until July 1, 2007, so any municipality could renegotiate expiring franchises under current federally allowed conditions. An oh-so-generous measure that would allow any city that does not collect the full 5% of gross receipts as allowed under federal law to go up to 4% on renewal. And the provision of two, count ‘em, two PEG channels, without charge mind you, to every little old city that wants them with the caveat that Cox could advertise on these channels.

What a deal! It seems too good to be true! Thank you Mr. Bennett for bringing this offer to the table, what would Tempe, Tucson, Mesa, Phoenix, Flagstaff, Scottsdale and Yuma do without your agile brain and acute business acumen? Only a guy like Bennett, with a degree in accounting, could figure out that 4% is better than 3% and 4% is still better than 5%.

One little question is nagging…what gives these home boys the right to completely ignore federal legislation and just make it up as they go along? The Congress empowered local communities to negotiate franchise renewals as they saw fit within certain parameters, yet here we have another state legislature thumbing their noses at Congress and doing everything they can to undercut their own cities and towns. And for what? Because Cox went back to being a privately held company and incurred a loss last year?

According to the Atlanta Business Chronicle:

“The Atlanta-based company, which was bought and taken private by parent Cox Enterprises Inc. late last year, reported in a 10-K filing with the Securities and Exchange Commission that it had a net loss of $2.4 billion on $6.4 billion in revenue in 2004. In 2003, Cox Communications had a net loss of $137.8 million on $5.8 billion in revenue.”

The Chronicle goes on to report that Cox:

“…recognized an impairment charge of $2.4 billion related to its cable franchise rights.”

How bizarre that the net loss and the cable franchise rights are exactly the same amount, $2.4 billion dollars. Now that’s what I call a “coinkee-dink.”

Lest you worry that these losses might lead to widespread unemployment in the Cox workforce, the Chronicle lists the salaries and bonuses for the top three executives, men who are bravely willing to sacrifice their own welfare for the good of the many.

“President and CEO James O. Robbins made a salary of about $1.3 million and bonus of $813,226 last year, compared with a salary of $1.2 million and bonus of about $1.7 million in 2003. Chief Operating Officer Patrick J. Esser made $700,000 and a bonus of $383,597 in 2004, compared with $615,060 and bonus of $738,072 in 2003. Chief Financial Officer Jimmy W. Hayes made $600,000 and a bonus of $273,998 last year, compared with $574,750 and bonus of $574,750 in 2003.”

Yet somehow from those pesky Arizona cities, towns and villages a compromise must come.

In closing, let us recall the great Charles Sumner who was beaten senseless on the floor of the Senate after delivering his “On The Crime Against Kansas” speech.

“From the beginning of our history the country has been afflicted with compromise. It is by compromise that human rights have been abandoned. I insist that this shall cease.”

Latest report is that AZ munis are not willing to accept the compromise, seems they insist that it cease.

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